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U.K. Inflation Pushes Up Treasury Debt Payments to a Record

  • A quarter of government debt is linked to inflation indexes
  • IFS says cost of debt will absorb more cash in coming months
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Photographer: Hollie Adams/Bloomberg
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Inflation took a toll on the U.K. public finances last month, driving interest payments on government debt to unprecedented levels.

The Treasury paid 8.7 billion pounds ($11.8 billion) in interest in June, the most for any month since records began in 1997, the Office for National Statistics said on Wednesday. The 6 billion-pound increase from a year ago was due to higher retail-price inflation pushing up the cost of servicing index-linked gilts.